8 student-loan firms agree to change conduct

Eight student loan companies have agreed to adopt broad changes following an investigation by the State of New York into deceptive marketing practices, Atty. Gen. Andrew Cuomo said.

Seven of the lenders agreed to pay a combined $1.4 million to settle the probe, he said. The eighth voluntarily agreed to adopt the changes but was not targeted in the investigation.

Cuomo said the seven companies that agreed to settle pushed higher-interest private loans, used bait-and-switch tactics and marketed products so they appeared to be federal loans. Federal loans have fixed interest rates that are often lower than private loans.